Didi Chuxing, China’s answer to Uber, said to consider Hong Kong listing in second half of 2018
A wave of Chinese technology IPOs are expected in the next 12 to 24 months amid strong investor appetite in Hong Kong for high-growth, new economy companies
Didi Chuxing, China’s largest ride-hailing service provider, is considering an initial public offering in Hong Kong that is expected to value the company at US$70 billion to US$80 billion, according to a report by Hong Kong Economic Times, citing unidentified people.
The Beijing-based company is preparing to list as early as the second half of this year and is open to options including weighted voting rights, said Wednesday’s report, which cited people familiar with the situation who don’t want to be identified because the information isn’t public.
In response to an e-mail inquiry, a Didi representative said it doesn’t comment on listing plans.
China has one of the world’s most dynamic technology start-up scenes, thanks to the rapid rise of an internet economy supported by a high mobile penetration rate and mobile-first consumer habits. A wave of Chinese technology IPOs in the next 12 to 24 months would likely set a record for Hong Kong, said John Hall, co-head of JPMorgan’s investment banking unit in Asia-Pacific and global head of technology services, in May.
Having driven Uber out of the country in 2016 in exchange for a minority stake, the Chinese ride-hailing giant has counted Apple, Softbank, Alibaba and Tencent among its biggest shareholders. Last year it handled 7.4 billion rides, compared with Uber’s 4 billion trips. Didi has also grown its global business by building alliances with Uber’s US rival Lyft, Southeast Asia’s Grab, Ola in India, Brazil’s 99, Taxify in Estonia and Careem, a ride-hailing operator in the Middle East and North Africa region.
Market speculation over a Didi IPO has been mounting for the past year. According to the HKET report, Didi has been in pre-listing consultations with investment banks since April.
The IPO would be taking place under the shadow of a recent safety scare after Didi had to deal with the death of a female passenger. Earlier this month, a 26-year-old man logged into his father’s account on Didi’s car-pooling service platform Hitch and allegedly went on to rape and kill his passenger, a 21-year-old flight attendant. He was later found dead by police in a river in Zhengzhou, capital of Henan province.
The incident has revived wider concerns over the safety of online ride-hailing services. In the Henan incident, Didi’s night-mode driver facial recognition system failed to work properly, according to a company statement.
Last week Didi announced an overhaul of its services, including mandatory facial recognition scans for all drivers before they start services every day. For Hitch drivers, facial recognition will be made compulsory for every Hitch trip and the company has also stopped pairing up rides between 10pm and 6am, after a one-week suspension, while it evaluates passenger-driver safety guarantees on the Hitch platform.